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O. Rm. P. Rm. Ramanathan Chettiar Vs. P.S.L. Ramanathan Chettiar and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai High Court
Decided On
Case NumberA.A.O. No. 171 of 1953 and Civil Misc. Petn. No. 571 of 1959 in Appln. No. 249 of 1947
Judge
Reported inAIR1960Mad207
ActsMadras Agriculturists Relief Act, 1938 - Sections 19(2); ;Code of Civil Procedure (CPC), 1908 - Sections 151
AppellantO. Rm. P. Rm. Ramanathan Chettiar
RespondentP.S.L. Ramanathan Chettiar and ors.
Cases ReferredIn Jagannath v. Mt. Ram Dularey
Excerpt:
madras agriculturists relief act (iv of 1938), amending act (xxiii of 1948)--section 19(2)--scope of--decree--on appeal confirmed--execution--application to scale down decree--principles of constructive res judicata not applicable--court of first instance's jurisdiction to revise decree ; the appellant's father deposited certain sums with the respondents' father on 11th march 1926, repayable with interest at thavanai rate. a demand was made on 2nd october 1944, and on non-compliance a suit was filed and was decreed. the respondents filed an appeal and for stay of execution but without success. the appellant levied execution and the respondents after paying the entire amount into court field an application in the high court that the appellant should not withdraw the amount without..... (1) this appeal arises from an order of the subordinate judge of devakottai, in i. a. no. 606 of 1952 in o. s. no. 33 of 1945 scaling down the decree passed in the suit by applying the provisions of madras agriculturists relief act, act iv of 1938 (which shall hereafter be referred to as the act). the decree-holder is the appellant.(2) in respect of a deposit made by his father with the respondents' grandfather the appellant obtained a decree in the suit referred to above on 27-12-1946 for a sum of rs. 11459-14-0, with subsequent interest and costs. both the respondents and the appellant filed respectively in this court an appeal and a memorandum of cross-objections against the decree. it is conceded that the respondents did not claim the benefit of the scaling down provisions of act iv.....
Judgment:
(1) This appeal arises from an order of the Subordinate Judge of Devakottai, in I. A. No. 606 of 1952 in O. S. No. 33 of 1945 scaling down the decree passed in the suit by applying the provisions of Madras Agriculturists Relief Act, Act IV of 1938 (which shall hereafter be referred to as the Act). The decree-holder is the appellant.

(2) In respect of a deposit made by his father with the respondents' grandfather the appellant obtained a decree in the suit referred to above on 27-12-1946 for a sum of Rs. 11459-14-0, with subsequent interest and costs. Both the respondents and the appellant filed respectively in this court an appeal and a memorandum of cross-objections against the decree. It is conceded that the respondents did not claim the benefit of the scaling down provisions of Act IV of 1938 at the time when the suit was pending in the trial court, or even at the time when the appeal was heard by this court. By the judgment and decree of this court dated 14-9-1951 the appeal as well as the memorandum of cross objections were dismissed.

(3) The appellant thereupon commenced execution proceedings. The respondents--the judgment-debtors countered them by filing applications under the provisions of Act IV of 1938, and S. 151 C.P.C. It is unnecessary to refer to those applications except to I. A. No. 606 of 1952 which was filed for scaling down the decree under S. 19(2) of Act IV of 1938. The decree-holder contested the application on various grounds, the principal one being that the court had no jurisdiction to amend the decree of the appellate Court which was passed after the coming into force of Act XXIII of 1948 (which shall hereafter be referred to as the amending Act). The learned Subordinate Judge negatived the contentions of the decree-holder and scaled down the decree. The present appeal arises from that order.

(4) It is not contested that the respondents are agriculturists within the meaning of S. 3(2) of the Act. S. 19(2), under which the application to the lower court was filed, was introduced by Act XXIII of 1948, and it came into force on 25-1-1949. That provision rendered the provisions of S. 19(1) applicable to decrees passed after the main Act. Ramaswami J. before whom the appeal originally came up for hearing felt that there was a conflict between the decisions in Narayanan Chettiar v. Annamalai Chettiar and Lingappa v.

Chinnaswami, 1955-1 Mad LJ 1 on the question whether the respondent would be barred by principles of res judicata in seeking relief under S. 19(2) of the Act. The appeal was thereupon directed to be heard by a Full Bench.

(5) The consideration of the question has however been rendered unnecessary in view of the decision of the Supreme Court in Narayanan Chettiar v. Annamalai Chettiar, C. A. No. . That was an appeal filed against the decision in . The Supreme Court has held that in the circumstances similar to the present case the debtor would be entitled to apply for scaling down of the decree under S. 19(2) of the Act.

(6) Section 19(2) of the Act was introduced by way of amendment by Amending Act referred to above. Prior to the amendment, S. 19 enabled the reopening and scaling down of the decrees passed against the agriculturists before the Act came into force. S. 19(2) made the provisions of S. 19(1) (which was S. 19 in the unamended Act) applicable to the case of a decree passed after the commencement of the Act. But the application of S. 19(2) which was S. 10 of Act XXIII of 1948, would be governed by S. 16 of the latter Act. In the decision referred to, the Supreme Court agreed with the view of this court that the amendments enacted under the amending Act apply to suits and proceedings described under the three clauses of that provision and that in order to obtain the benefit of S. 19(2) of the Act the debtor must establish that his case came under one of the three clauses of S. 16 of the Amending Act, S. 16 runs:

"The amendments made by this Act shall apply to the following suits and proceedings, namely:--

(i) all suits and proceedings instituted after the commencement of the Act;

(ii) all suits and proceedings instituted before the commencement of this Act, in which no decree or order has been passed, or in which the decree or order passed has not become final, before such commencement;

(iii) all suits and proceedings in which the decree or order passed has not been executed or satisfied in full before the commencement of this Act;

Provided that no creditor shall be required to refund any sum which has been paid to or realised by him, before the commencement of this Act."

Section 16, cl. (1) which renders the amendment applicable to suits thereafter to be filed, that is after 23-1-1949, would not in terms apply to the present case as the suit had been filed before the amending Act came into force.

(7) The contention advanced on behalf of the appellant before us was that in respect of a suit or appeal which was pending at the time when the amending Act came into force, but where a decree was passed subsequent thereto, the provisions of both clauses (ii) and (iii) of S. 16 would apply and that the debtor could at any time apply for scaling down of the decree in accordance with S. 19(1) of the Act. It was argued that S. 16, clause (iii) giving as it does a statutory right to the debtor, it could not depend for its application, on any act of the debtor in either applying or omitting to apply for the benefits under the Act under S. 16(ii). We cannot accept this contention. The three clauses of S. 16 are disjunctive and each of them relate to a distinct category and a case that would come under S. 16 clause (ii) would not be comprehended by S. 16 clause (iii) as well. This was the view expressed in Venkataratnam v. Seshamma, (FB) which followed the decision in . The Supreme Court has

accepted this view in the decision referred to above. The debtor in the instant case would therefore have no right to substain his application under S. 16 clause (iii).

(8) The question then arises whether the debtor would have the decree amended by reason of S. 16 clause (ii) which renders the provisions of the amending Act applicable to suits or proceedings pending on the date when that Act came into force, that is, on 25-1-1949. We have already pointed out that the appeal from the decree was pending in this Court at that time. S. 16 clause (ii) would clearly entitle the debtor to apply for relief under the Act even at the time when the appeal was heard. In similar circumstances, held that as the

right to plead the benefits under the Act was available to the debtor at the time when the appellate court passed the decree, he ought to have applied for relief at that stage, and having failed to do so, he was barred by principles of res judicata from applying at a later stage.

(9) The question however depends on the construction of S. 16(ii) of the Amending Act. If that provision enables the debtor to apply for relief in the class of cases contemplated by it, either before or after the decree, the rule of res judicata which is essentially a rule of procedure could not abrogate a right expressly given by the statute. The Supreme Court has held that the relief under S. 19(2) of the Act is one which expressly relates to cases where decrees have already been passed and would entitle the debtor to apply unless there is any limitation to such a right imposed by clause (ii) of S. 16 of the Amending Act. S. 16(ii) relates to suits and proceedings instituted before the amending Act came into force and it should apply (1) when no decree or order had been passed and also (2) when the decree or order had not become final on that date. The section does not prescribe as to when the relief is to be claimed and having regard to the generality of S. 19(2) it should be held that the statute expressly gave a right of amendment of decree thereunder. The learned Judges of the Supreme Court held that the true test was whether the suit or proceeding was instituted before 25-1-1949 and whether in that suit or proceeding an order or decree for repayment of the debt was passed. They observed:

"It may prima facie appear to be anomalous that it should be available to a party to ask for relief under the Act after the passing of the decree, when he had an opportunity of asking for that relief before the decree was passed, but did not do so. The legislature may not have realised that this would be so; but as the amendments stand, it is clear that in cases covered by clause (ii) of S. 16 of the Amending Act, a party is entitled to ask for relief under the Act at two stages, before a decree for repayment of the debt has been passed and also after such a decree has been passed."

The right to have decrees of the kind contemplated by S. 16(ii) amended by applying the provisions of the Act being thus a right conferred by the statute the principle of constructive res judicata would not apply. It is unnecessary for the purpose of the present case to consider as to what would be the result if the debtor had applied for the benefits under the Act when the decree was passed. The Supreme Court in the judgment aforesaid has indicated that to such a case the bar of res judicata would apply.

(10) In the present case an appeal in this court was pending at the time when the Amending Act came into force. We have already pointed out that at the stage of the appeal there was no plea for relief under the Act. The decision of the Supreme Court would directly apply to the instant case. The respondent would therefore be entitled to apply for relief under S. 19(2) of the Act.

(11) This, however, does not dispose of the appeal as the appellant has raised other objections to the decision of the lower court. As regards one of the objections, namely, whether the lower court was competent to give relief under S. 19(2) of the Act by way of scaling down a decree passed by this court, the respondent by way of abundant caution has filed C. M. P. No. 571 of 1959 in A. S. No. 249 of 1947. That application is pending in this court and will be heard by a Bench. It is, therefore, desirable that the other questions involved in this appeal should be decided by the Bench along with C. M. P. No. 571 of 1959 and it will be posted accordingly.

(This appeal and the petition coming on for hearing in pursuance of the above order of the Full Bench before their Lordships Mr. Justice Rajagopalan and Mr. Justice Ramachandra Iyer on 8-8-1959, the Court delivered the following Judgment):--

Ramachandra Iyer, J.

(12) When the above matter was heard by us on receipt of the opinion of the Full Bench, the case for the appellant was presented to us in two aspects--(i) the jurisdiction of the lower court to grant relief under S. 19(2) of the Act and (ii) the liability of the decree debt to be scaled down under its provisions. For appreciating the contentions urged, it is necessary to set out a few facts.

(13) As indicated in the judgment of the Full Bench, the decree was in respect of a claim for return of a deposit made by the appellant's father with the respondent's father. The deposit was made on 11-3-1926, and was repayable on demand together with interest at the thavanai rate. A demand was made on 2-10-1944, and that not having been complied with, the suit was filed a few months thereafter. The respondent's case was that the transaction was a mere loan, and that the claim was barred by limitation. The learned Subordinate Judge held that the transaction amounted to a deposit and overruling the other contentions of the respondent passed a decree for the sum claimed.

(14) The respondent thereupon filed an appeal, A. S. No. 249 of 1947, to this court. Pending the appeal he applied for stay of execution of the decree but without success. The appellant levied execution, and at that stage the respondent came forward with an application to this court in C. M. P. No. 3112 of 1947, offering to deposit the entire decree amount into court, and seeking directions to prevent the appellant from taking the money except on furnishing security. This court by its order dated 9-7-1947 acceded to that request and directed that, if the respondent were to deposit the entire decree amount by 20-8-1947, the appellant would not be allowed to draw out the same satisfaction of the decree except on furnishing security for its repayment in case the respondent were to succeed in A. S. No. 249 of 1947. The debtor made the deposit on 24-7-1947, within the time prescribed by the order of this court. The appellant did not draw the money as he failed to comply with the condition imposed on the drawing of the money. On 14-9-1951, this court dismissed the appeal, holding that the transaction was one by way of deposit payable on demand, and that as the demand made in the instant case was within three years of the suit, the claim was not barred by limitation.

(15) Mr. R. Gopalaswami Aiyangar, the learned advocate for the appellant, contended that as the decree of the trial court was merged in the decree of this court in A. S. No. 249 of 1947, the lower court would have no jurisdiction to grant the relief by way of an amendment of the decree under S. 19(2) of the Act, and that proper court to grant the relief would be only this court which disposed of the appeal. To get over this objection the respondents have filed an application to this court in C. M. P. 571 of 1959, in A. S. No. 249 of 1947, for scaling down the amount due under the appellate decree. The objection of the appellant to that application is that by the time when that application was filed, the respondents were not agriculturists and would, therefore, be not entitled to the benefit of Act IV of 1938. The question of jurisdiction of the lower court is, therefore, material for the purposes of this case.

(16) Where a decree of a court is appealed against its finality would be suspended and the decree passed by the appellate court would supersede it, be it a case of either affirmance, modification or reversal. In all such cases the appellate decree will be the only decree for purposes of execution. It is, therefore, contended that where a decree has been passed by an appellate court, the original court would have no jurisdiction to amend the decree. Reference was made in this connection to the cases arising under S. 152 C.P.C. S. 152 C.P.C. embodies what in the English Courts was called "the slip rule"; it gives power to a court to correct the clerical or arithemetical mistakes in judgments, decrees, etc. The provision contemplates that the decree or judgment would be a valid one and the jurisdiction conferred was only to correct the mistakes of the type mentioned. Where, however, the matter was taken up on appeal the judgment or decree was set at large and all mistakes could be rectified and a proper decree passed by the appellate court, it would follow that that court alone have the power to amend its judgment.

(17) But the amendment contemplated by S. 19 of the Act is of a different character. It does not contemplate the subsistence of the decree but contemplates a reopening of the same, scaling down the debt and passing a revised decree in accordance with the Act. An amendment under S. 19 of the Act does not, therefore, contemplate a mere correction of an existing decree in regard to slips or mistakes but the passing as it were of a new and revised decree. The jurisdiction for such an amendment of the decree is not one under Ss. 152 and 153 Cr.P.C., but under S. 19 of the Act. That provision enacts that an amendment of the decree thereunder should be by the court which passed the decree.

If there is no other provision it would certainly mean that where a decree of the trial court has been superseded by one by the appellate Court, the latter would be the one that passed the decree. But the statute has provided an interpretation of the words "the court which passed the decree" in this explanation to S. 20. S. 20 is complementary to S. 19. That enables an executing court to stay proceedings till an amendment of the decree has been made by the court which passed the decree. The explanation is that the expression shall have the same meaning as in the Civil Procedure Code. That the explanation would apply to provisions of S. 19 is clear from the fact that S. 20, to which the explanation is added, itself refers to the court which passed the decree for amending the decree under S. 19.

In the Civil Procedure Code there is no definition of the expression "court which passed a decree." S. 37 C.P.C. states that the expression "the court which passed a decree" shall in relation to the execution of decrees, unless there is anything repugnant in the subject or context be deemed to include, where the decree to be executed has been passed in exercise of appellate jurisdiction, the court of first instance. The fiction enacted by that provision would on its terms apply only to the case of an execution and not to other matters provided for in the Code. It was contended for the appellant that fiction could not apply to proceedings under S. 19, which are not proceedings in execution but in the suit itself. Plausible as the argument appears, we cannot accept the same. S. 20 which gives power to an executing court specifically refers to that court as the executing court. Ss. 19 and 20 use the expression "a court which passed a decree" for the purpose of amending the decree after applying the provisions of the Act. Therefore the explanation was necessary only to define the Court which was to amend the decree and for no other purpose. There is, therefore, no reason to think that explanation under S. 20 referred to the Court only for the purpose of execution. The effect of the explanation is that a statutory definition has been given to the expression "the court which passed the decree". The court to amend the decree would be that court which would be the court for execution under S. 37 C.P.C.

(18) In Gangaraju v. Ramayya, ILR (1939) Mad 520: (AIR 1939 Mad 483), it was held that Ss,. 19 and 20 of Act IV of 1938 should be read together and the explanation of the expression "a court which passed the decree" in S. 20 would apply to S. 19, and that an application to scale down a decree debt and amend the decree could properly be made to the court of the first instance, although the decree of that court had been superseded by the decree of an appellate court. This view was accepted and followed in Periaswami v. Ramaswami, ILR 1941 Mad 53: (AIR 1941 Mad 113) and in 1955-1 Mad LJ 1.

(19) Mr. R. Gopalaswami Aiyangar for the appellant contended that those decisions should no longer be held to be correct, having regard to the decisions in Veerappa Chettiar v. Sivagami Achi,1941-2 Mad LJ 1064: (AIR 1942 Mad 291), Palani Mudali v. Athiappa Goundan, 1942-2 Mad LJ 599: (AIR 1943 Mad 160) and Moidin Bacha v. Chidambaram Pillai, 1944-2 Mad LJ 338: (AIR 1945 Mad 86). In those cases there were decrees passed by the trial court before the coming into force of Act IV of 1938. Appeals were filed against those decrees, and the appeals were decided after the Act came into force. It was held that the pendency of the appeal suspended the finality of the decree of the original court, and that, therefore, an application under S. 19 of the Act would not lie to the trial court, although such decrees had been passed before the Act came into force.

It was also held that as by the time the appellate decree was passed the Act had come into force, the relief to which a party would be entitled to under the Act would be to urge before the appellate court the plea under the Act, before judgment in the appeal and that S. 19 did not authorise the amendment of a decree passed after the Act. None of those cases was concerned with the problem where if both the original and appellate decree were passed, before the Act, which of the two courts would have jurisdiction to amend the decree under S. 19. The principle that the original decree in a case, where an appeal has also been filed, is suspended, and that the appellate decree would be the only decree between the parties, was involved in the aforesaid decisions to show that no petition under S. 19 would lie to the original court, although that court's decree was passed before the Act came into force. That principle would have no application to a case where the appellate decree was itself capable of being amended under S.

19.

To such a case the decision in ILR 1939 Mad 520: (AIR 1939 Mad 483) would apply. That decision has been accepted and acted upon by this court for nearly 20 years, and even if we were not convinced to its correctness we would have accepted it if only on the principle of stare decisis. We are, however, satisfied that that case has been, if we may say so with respect, correctly decided. It follows that an application under S. 19(1) or 19(2) has to be made to the court of the first instance which passed the decree, even though the appellate court had either affirmed or modified or reversed the decree of that court. Therefore, the lower court alone would have jurisdiction to entertain the application under S. 19(2). C. M. P. No. 571 of 1959 fails and is dismissed.

(20) The learned advocate for the appellant tried to raise the question, whether the respondent had made out his status as an agriculturist on the crucial dates, and whether the decision of the lower court which held that the respondent was entitled to relief under the Act was not sustainable. We declined however to hear him on that point as he had conceded before the Full Bench that the respondent was an agriculturist to whom the provisions of the Act would apply.

(21) It was next contended that, as the decree had become satisfied by payment of money into court on 24-7-1947 in accordance with the order in C. M. P. No. 3112 of 1947, there would be no jurisdiction to amend the decree. The argument was based upon the provisions of S. 16 of Act XXIII of 1948. That enacts that the amendments made by that Act (which had been incorporated in the main Act, Act IV of 1938) would apply to the three categories of cases mentioned therein. There is a proviso to the section which runs thus: "Provided that no creditor shall be required to refund any sum which has been paid to or realised by him, before the commencement of this Act."

(22) The contention on behalf of the appellant was that the amount deposited in pursuance of the order in C. M. P. No. 3112 of 1947 should be deemed to be money paid under O. 21, R. 1 C.P.C., and when it was paid into court, there was a pro tanto satisfaction of the decree which would attract the provisions of the proviso to S. 16. Order XXI, rule 1 prescribes the modes of paying the money under a decree, and states that all money payable under a decree shall be paid into the court whose duty is to execute the decree or out of court to the decree holder or otherwise as the court which made the decree directs. Sub-rule 2 of that provision directs that notice of such payment shall be given to the decree-holder. It is conceded that no such notice was given in the present case.

(23) The learned advocate for the appellant relied upon the decision in Tata Iron and Steel Co. v. Baidyanath, ILR 2 Pat 754: (AIR 1924 Pat 118), where it was held that a payment into court in satisfaction of the decree created a valid discharge of the judgment debt, and that the omission to give a notice required by O. 21, R. 1 sub-rule 2 could not affect that discharge. The question in the present case is not whether the payment was invalid or valid in the absence of a notice under O. 21, R. 1(2), but whether the payment of the decree amount on 24-7-1947 in pursuance of the order in C. M. P. No. 3112 of 1947 would at all amount to a payment under O. 21, R. 1, as the amount could not be said to have been paid voluntarily or unconditionally. The payments under O. 21, R. 1 are payments which should be unconditional in their nature. Under the order in C. M.P. No. 3112 of 1947, there was an impediment or a restriction against the decree-holder obtaining the money when deposited in terms of the order. The payment into court being conditional cannot be held to be one coming under O. 21, R. 1 C.P.C. In Sheo Gholam Sahu v. Rahut Hossein, ILR 4 Cal 6, a sum of money was paid into court on behalf of the judgment-debtor in lieu of security for the purpose of setting aside a sale in execution of a decree pending an appeal against an order directing sale. That appeal ultimately failed. It was held that neither the depositor nor the judgment-debtor could claim to have such deposit refunded. The learned Judges held that so far as the money was concerned when the appeal was dismissed, it must be taken to have been transferred to the credit of the decree-holder.

(24) In Ramiah Aiyar v. Gopala Aiyar, ILR 41 Mad 1053: (AIR 1919 Mad 607), there was an order for the arrest of the defendant before judgment. To obviate the arrest a sum of money was deposited into court. It was held that the money which was paid into court to the credit of the action, was charged with a lien in favour of the plaintiff on the latter obtaining a decree in his favour, and that the judgment-debtor's representative would have rights only subject to the claims of the plaintiff.

(25) The two cases referred to above were concerned with the attempts on the part of the judgment-debtor or his representative to take away monies deposited for the benefit of the decree-holder or the plaintiff. It was held that during the pendency of the proceedings or action there was a lien or charge in favour of that person and on his succeeding in the proceedings in court, the amount stood transferred to his credit. Another aspect of the matter is involved in the present case, that is, when does the decree-holder become absolutely entitled to the monies? His title would commence only when the judgment-debtor's title ends, that is on the termination of the proceedings in his favour.

(26) Where money is deposited under an order of court, the terms of the deposit would be governed by the order. If for example an order grants only a time for deposit with no other restriction, the deposit made would go in satisfaction of the decree. If, on the other hand, the order imposes a condition on the decree-holder drawing the money like furnishing of security, there would be an impediment to the satisfaction of the decree. The mere fact that the decree-holder furnished security would not affect the question as by the order of the court it could be deemed to have been made only provisionally subject to the result of the pending proceedings. The principle of the decision in ILR 4 Cal 6 and ILR 41 Mad 1053: (AIR 1919 Mad 607) will, however, apply to those cases and if the proceedings terminate in favour of the decree-holder, the monies would stand transferred to him on the date thereof. The conditions imposed by the order would then cease.

(27) In the present case, when the money was deposited on 20-8-1947 it was done in pursuance of the order in C. M. P. No. 3112 of 1947. That order placed a restriction on the appellant drawing the money. That could not be held to be a deposit under O. 21, rule 1 C.P.C. but one under the order of court. The money deposited could be deemed to be a payment to or a realisation on behalf of the appellant only on 14-9-1951, when the appeal was disposed of. By that time Act XXIII of 1948 had come into force, and therefore the proviso to S. 16 of that Act would not apply to the case. It follows that the money which was paid by the respondent into court was realised by the appellant only after the commencement by the act, and that the proviso to S. 16 would not apply to such a case.

(28) It was next contended on behalf of the appellant that the provisions of S. 19(2) of the Act would not apply to the instant case, as the decree was not one for the repayment of a debt payable before Act IV of 1938 came into force. Section 19(2) states that the provisions of sub-sec. (1) shall also apply to cases where after the commencement of the Act a court has passed a decree for the repayment of a debt payable at such commencement.

(29) In Govindasami Gounder v. Ramaswami Gounder, 1958-2 Mad LJ 185, it was held that the expression "payable at such commencement" would mean payable at the commencement of Act IV of 1938, that is, 23-3-1938.

(30) The question for consideration would then be whether the debt in respect of which the decree had been passed in the instant case was one payable at such commencement, that is, at the commencement of Act IV of 1938.

(31) The term "debt" has been defined in Section 3(iii) as meaning "any liability in cash or kind, whether secured or unsecured, due from an agriculturist, whether payable under a decree or order of a civil or revenue court or otherwise, but does not include rent........" Under the definition a debt is one which is due from an agriculturist.

(32) The learned advocate for the respondent contended that the debt which was payable in future would be a debt that would be due and in support of that proposition cited Bancharam Majumdar v. Adyanath, ILR 34 Cal 936 (FB), where it was held that a sum of money which was certainly and in all events payable was a debt, without regard to the fact whether it was payable then or at a future time. That may be so. But the question in the present case is whether the debt was one which would come within the provisions of S. 19(2) of the Act. Section 19(2) restricts the power of amendment by the court, to a case where the debt was payable before the commencement of the Act.

(33) We have already referred to the fact that in the present case the decree was passed on the basis of a deposit made by the appellant's father with the respondent's father, and that the demand for the return of the money was made on 3-10-1944. If the debt became payable only on demand, it would follow that there was no decree in respect of a debt payable at the commencement of Act IV of 1938. To such a case the provisions of S. 19(2) would not in terms apply. It becomes, therefore, relevant to consider the nature of a deposit and when it becomes payable.

(34) The receipt of an amount by a banker constitutes him a debtor to the depositor and the money deposited would be payable as a debt either on demand or on the conditions stipulated between the parties.

(35) In Sheldon on the Practice and Law of Banking, 6th Edn. at page 221, it is stated thus:

"When a customer pays in money on deposit, the money cannot be considered as a fund held by the banker in trust for the customer. It is merely a loan to the banker and the customer is entitled to no more than the repayment of an equivalent sum at the time which the agreement between the two parties specifies."

A deposit is generally agreed to be paid either (i) on demand, or (ii) on notice of a stipulated period or (iii) after a fixed period. There is no doubt that in the last of the cases mentioned above the money would not become payable except after the stipulated period. It is contended for the respondent that in the first two cases demand would not be a condition precedent for claiming the money payable as the words "payable on demand" should be interpreted as meaning payable immediately. We cannot agree with that contention.

(36) In Mohamed Akbarkhan v. Attar Singh, ILR 17 Lah 557: (AIR 1936 PC 171), Lord Atkin observed that a demand by a depositor would be the normal condition of the obligation of the depositee to repay. His Lordship stated further

"Was this then a loan or was it a deposit payable on demand? It should be remembered that the two terms are not mutually exclusive. A deposit of money is not confined to a bailment of specific currency to be returned in specie. As in the case of a deposit with a banker it does not necessarily involve the creation of the trust, but may involve only the creation of the relation of debtor and creditor, a loan under conditions. The distinction which is perhaps the most obvious is that the deposit not for a fixed term does not seem to impose an immediate obligation on the depositee to seek out the depositor and repay him. He is to keep the money till asked for it. A demand by the depositor would therefore seem to be a normal condition of the obligation of the depositee to repay."

(37) In Ramaswami Chettiar v. Manickam Chettiar, 1938-1 Mad LJ 56: (AIR 1938 Mad 236), it was held that the right to sue in a case of deposit did not accrue till there was a demand and a refusal. The obligation of a debtor in regard to a deposit has been considered by the Privy Council in Suleman Haji Ahmed Umer v. Abdulla Haji Rahimtulla, 1940 Mad WN 1000: (AIR 1940 PC 132), where it was held that the test to decide whether the transaction as a loan or deposit, was to ascertain whether on the admitted facts there was an obligation on the part of the debtor to seek out the creditor and repay him, or whether he was to keep the money till the creditor applied for, and whether in a case there was no duty on the part of the debtor to seek out his creditor and repay him but only to do so if and when the creditor requested the payment, the case was one of a deposit. It would follow that there would be no obligation on the part of the depositee to pay the money to the depositor unless the terms of the contract of deposit were fulfilled, and in a case of deposit payable on demand unless a demand had been made.

(38) It was contended on behalf of the respondent that, although the money was payable under the deposit only on demand, there was no prohibition on the depositee from paying the money at any time he chose, and that as the amount so deposited could have been paid by the depositee at any time, it should be held that the money was one that was payable to him immediately after the deposit was made. He contended that the words "payable before the commencement of the Act" occurring in S. 19(2) of the Act would mean money that could have been paid at the option of the debtor. That is not correct. the "payable" in that section would indicate money which the debtor was liable or obliged to pay. A mere option in the banker or debtor to pay cannot render the amount as one "payable."

(39) It was then contended that in case of a deposit, which was payable on demand, no actual demand was necessary as the courts have entertained suits without the formality of demand or proceeded to attach or issue garnishee orders in respect of deposits in the hands of the depositees at the instance of a creditor of the depositor. In support of the contention reference was made to the decision in Narasimham v. Narayana Rao, 92 Ind Cas 405: (AIR 1926 Mad 66), where Venkatasubba Rao J. observed that the making of the demand was entirely dependent upon the volition of the plaintiff and the period of limitation may be indefinitely prolonged, and a suit might be instituted without even a demand being made, in which case no question of limitation would arise, and the fixing of the suit would itself amount to a demand. In Allah Ditta v. Sadhu Shah, 147 Ind Cas 338: (AIR 1934 Lah 179), it was held that in regard to a deposit, even if no demand was made, the plaintiff should not be non-suited in the absence of any demand as the bringing of the suit would itself constitute a demand. In our opinion, those decisions cannot and do not support the proposition contended for, namely, that money in respect of the deposit would become "payable" without a demand. They only state the proposition that where a suit had been filed the plaint in the suit could be deemed to be a demand, thus emphasising the necessity of a demand in respect of the money due in regard to a deposit.

(40) Deposits standing to the credit of a debtor could be attached in execution and the issue of a garnishee order would depend on the terms on which the deposit was held. That would depend on the debt being due or accruing due. A deposit payable on demand, on notice for a fixed period which had been given or one repayable at a future date would be attachable.

(41) In Joachimson v. Swiss Bank Corporation, 1921-3 KB 110 it was held that the service of a garnishee order nisi was equivalent to a demand. In Jagannath v. Mt. Ram Dularey, , it was held that the word "demand" when used in connection with the deposit really meant what it stated that is that the deposit was to be paid only when demanded. A demand would, therefore, be essential to make a deposit payable on demand "payable." Therefore in the absence of demand the debt could not be held to be payable. There is little doubt on the facts of the case that the money entrusted to the respondent's father was a deposit with a banker, which was not made payable until there was a demand therefor. It follows that it became payable on 2-10-1944. The provisions of S. 19(2) would not, in our opinion, apply to such a case. The decree in respect of such a transaction would not be liable to be scaled down.

(42) The result is that the order allowing an amendment of the decree under S. 19(2) cannot be justified and it is set aside. The appeal is allowed with costs.

(43) Appeal allowed.


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